{"id":64743,"date":"2024-11-27T10:10:39","date_gmt":"2024-11-27T15:10:39","guid":{"rendered":"https:\/\/techservealliance.org\/?p=64743"},"modified":"2024-11-27T10:42:21","modified_gmt":"2024-11-27T15:42:21","slug":"important-update-on-federal-exemptions-from-overtime-you-can-pay-less-now","status":"publish","type":"post","link":"https:\/\/techservealliance.org\/important-update-on-federal-exemptions-from-overtime-you-can-pay-less-now\/","title":{"rendered":"Important Update on Federal Exemptions from Overtime \u2013 You Can Pay Less Now"},"content":{"rendered":"\t\t
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Previously, Becker published an article warning employers of a new U.S.<\/p>\n

<\/p>\n

Department of Labor (\u201cDOL\u201d) Rule (the \u201cRule\u201d) regarding increases to the salary<\/p>\n

<\/p>\n

thresholds for federal exemptions from minimum wage and overtime under the<\/p>\n

<\/p>\n

Fair Labor Standards Act (the \u201cFLSA\u201d). As predicted in the aforementioned<\/p>\n

<\/p>\n

article, there were legal challenges to the Rule and, on November 15, 2024, a<\/p>\n

<\/p>\n

federal court in Texas vacated the Rule. As a result of the court\u2019s decision, the<\/p>\n

<\/p>\n

salary requirements for the executive, administrative, and professional<\/p>\n

<\/p>\n

exemptions (the \u201cEAP Exemptions\u201d) will continue to be $644\/week ($35,568<\/p>\n

<\/p>\n

annualized) nationwide. Notably, the required salary increases that went into<\/p>\n

<\/p>\n

effect on July 1, 2024 under the Rule, which was $844\/week ($43,888<\/p>\n

<\/p>\n

annualized), are also vacated.<\/p>\n

\u00a0<\/p>\n

<\/p>\n

<\/p>\n

Executive, Administrative, and Professional Exemptions:<\/strong><\/h2>\n
\u00a0<\/strong><\/div>\n

<\/p>\n

For the EAP Exemptions, the FLSA generally requires that employees perform<\/p>\n

<\/p>\n

certain job duties to qualify for exemptions. The Court reasoned that the Rule<\/p>\n

<\/p>\n

exceeded the DOL\u2019s statutory authority because the Rule \u201cis not based on a<\/p>\n

<\/p>\n

permissible construction of [the FLSA] \u2026 the minimum salary imposed by the<\/p>\n

<\/p>\n

2024 Rule \u2018effectively eliminates\u2019 consideration of whether an employee performs<\/p>\n

<\/p>\n

\u2018bona fide executive, administrative, or professional capacity\u2019 duties in favor of<\/p>\n

<\/p>\n

what amounts to a salary only test.\u201d<\/p>\n

\u00a0<\/p>\n

<\/p>\n

<\/p>\n

Highly Compensated Employee Exemptions:<\/strong><\/h2>\n
\u00a0<\/strong><\/div>\n

<\/p>\n

The FLSA also includes a highly compensated employee exemption (the \u201cHCE<\/p>\n

<\/p>\n

Exemption\u201d), which provides that employees who earn the requisite salary and<\/p>\n

<\/p>\n

customarily and regularly perform at least one of the duties of an exempt<\/p>\n

<\/p>\n

executive, administrative, or professional employee identified in the standard tests<\/p>\n

<\/p>\n

for exemption are not covered by the minimum wage and overtime requirements.<\/p>\n

<\/p>\n

Prior to the Rule, the salary requirement for the HCE Exemption was $684\/week<\/p>\n

<\/p>\n

and $107,432\/year. Effective July 1, 2024, the salary requirement was increased<\/p>\n

<\/p>\n

to $844\/week and $132,964\/year. However, as a result of the Rule being vacated,<\/p>\n

<\/p>\n

the HCE Exemption remains $684\/week and $107,432\/year. The Court<\/p>\n

<\/p>\n

specifically explained that its \u201canalysis regarding the legality of the changes to the<\/p>\n

<\/p>\n

standard salary level applies equally to the Department\u2019s changes to the HCE<\/p>\n

<\/p>\n

level.\u201d<\/p>\n

\u00a0<\/p>\n

<\/p>\n

Conclusion:<\/strong><\/h2>\n
\u00a0<\/strong><\/div>\n

<\/p>\n

What does this change mean for employers? Simply put, employers will not need<\/p>\n

<\/p>\n

to make the choice between raising the salaries or paying minimum wage and<\/p>\n

<\/p>\n

overtime. It is also exceedingly unlikely that the Court\u2019s decision will be<\/p>\n

<\/p>\n

overturned on appeal because (i) the decision will be appealed to the Fifth Circuit<\/p>\n

<\/p>\n

Court of Appeals, which is likely to agree with the Court\u2019s decision, and (ii) the<\/p>\n

<\/p>\n

DOL will be under the authority of an entirely different presidential<\/p>\n

<\/p>\n

administration effective January 20, 2025, which is also likely to agree with the<\/p>\n

<\/p>\n

Court\u2019s decision. It is important to note, that this decision does not affect state<\/p>\n

<\/p>\n

laws requiring higher salary thresholds for employees to qualify as exempt from<\/p>\n

<\/p>\n

minimum wage and overtime requirements. Therefore, staffing companies and<\/p>\n

<\/p>\n

employers must still be aware of state laws.<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

This article was provided to TechServe by Becker. Learn more about Becker here<\/a>.<\/p>\n

<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Previously, Becker published an article warning employers of a new U.S. Department of Labor (\u201cDOL\u201d) Rule (the \u201cRule\u201d) regarding increases to the salary thresholds for federal exemptions from minimum wage […]<\/p>\n","protected":false},"author":25,"featured_media":64769,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_company_domain":"","_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[1],"tags":[],"topics":[44,230],"member-content":[],"class_list":["post-64743","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","topics-legal-legislative","topics-suppliers"],"acf":[],"_links":{"self":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/64743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/comments?post=64743"}],"version-history":[{"count":5,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/64743\/revisions"}],"predecessor-version":[{"id":64785,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/64743\/revisions\/64785"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media\/64769"}],"wp:attachment":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media?parent=64743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/categories?post=64743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/tags?post=64743"},{"taxonomy":"topics","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/topics?post=64743"},{"taxonomy":"member-content","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/member-content?post=64743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}